The Treasury Department’s much anticipated report on banking regulations is set to include measured proposals for revising post-crisis rules, indicating the Trump administration is more focused on scaling back the 2010 Dodd-Frank Act than blowing it up.
The review, which may be released late Monday, is designed to provide a road map for regulatory agencies to begin chipping away at strictures put in place after the 2008 market crash, a person familiar with the matter said. Among the major targets are the Consumer Financial Protection Bureau and the so-called Volcker Rule than bars banks from making speculative bets with their own capital, the person added.
Still, the report isn’t likely to be an outline for doing “a big number” on Dodd-Frank, as President Donald Trump has vowed. Instead, it is designed to offer policy prescriptions that regulators could achieve on their own, underscoring the difficult task of getting legislation through Congress.
The 150-page document is the result of an executive order that Trump signed at the beginning of February. While the study seeks to open another front in the administration’s deregulatory agenda, it’s not clear how it will play on Capitol Hill where health care and tax reform are more pressing priorities. In addition, House Republicans have pursued a much more aggressive approach to revamping financial rules.
Last week, the House passed a sweeping bill that would dismantle many of the constraints the Obama administration imposed on Wall Street. But that legislation has little chance in the Senate unless it is moderated significantly because it would need Democratic votes. Democrats have largely opposed re-opening Dodd-Frank, arguing that the law is needed to hold big banks accountable after their risky trading helped fuel the meltdown.
Some of the Treasury’s recommendations will require congressional action, although other parts of the report will simply identify problems and not offer specific solutions, said the person, who spoke on the condition of anonymity because the report hasn’t been released publicly. Those issues would need to be debated by regulators.
Even getting smaller fixes through the agencies may be problematic until the administration gets its own appointees at key regulators such as the Federal Reserve, the Federal Deposit Insurance Corp. and the CFPB.